10 Reasons Why The Fiscal Commissions Social Security Proposals Should be DOA

December 1, 2010

Isaiah J. Poole

The co-chairs of the White House National Commission on Fiscal Responsibility and Reform released its deficit-reduction ideas earlier today, and a range of progressive leaders are united in saying its proposals, particularly on Social Security, should be rejected outright.

“Fiscal Commission Co-Chairs Erskine Bowles and Alan Simpson’s latest proposal to radically change Social Security once again slashes Social Security benefits for most Americans, now and in the future.” says Eric Kingson, co-chair of the Strengthen Social Security Campaign. “Again, it disregards the will of the American people who do not want Social Security benefits cut. The Simpson-Bowles proposal was dead on arrival once; it should be considered even deader the second time around.”

Here are their 10 reasons why. The deficit commission proposal:

1. Deeply cuts the benefits of middle-class families. Benefits for retirees, survivors and disabled workers will be cut between 17% and 36% for young people entering the workforce today, affecting those earning an average of $43,000 (17%) to $107,000 (36%) a year over their working lives, according to the Social Security Chief Actuary.

2. Closes Social Security’s long-range funding gap primarily by cutting already low benefits, rather than by raising taxes on those who can most afford to pay. Ninety-two percent of Social Security’s long-range funding gap is closed by cutting promised benefits. Instead, this gap could be closed, as most Americans want, by requiring those employees (and their employers) who make more than $107,000 a year to pay Social Security taxes on all their wages, as the rest of us do who earn less.

3. Raises the retirement age to 69. This is a 13% benefit cut on top of the 13% cut already made when the retirement age was increased from 65 to 67, according to the Social Security Administration.

4. Raises the early retirement age to 64. Most Americans claim Social Security benefits before age 64, even though the benefits are currently reduced by as much as 25% when they do so. That’s usually because they work in physically demanding jobs, have health problems, or can no longer find work.

5. Discriminates against lower-wage workers by raising the retirement age. Upper-income Americans are living longer. But in recent years the life expectancy of lower-income men has increased only slightly and the life expectancy of lower-income women declined.

6. Reduces the annual cost-of-living adjustment (COLA) for Social Security beneficiaries. The proposal would reduce the purchasing power of benefits by 3.7% after 10 years of receiving benefits and by 6.5% after 20 years, according to the Social Security chief actuary.

7. Hurts current retirees, contrary to promises made by the fiscal commission Co-Chairs. The change in the COLA calculation would affect all beneficiaries, not just retirees, starting in 2012.

8. Breaks faith with our nation’s veterans and service members. Forty-three percent of veterans receive Social Security. They or their families will see their Social Security disability benefits cut deeply if they are seriously injured in combat, their survivors’ benefits cut substantially if they die in combat, and their retirement benefits cut significantly just like all other Americans.

9. Harms our grandchildren the most. The younger a person is, the deeper the cuts because of the increase in the retirement age and the changes in the benefit formula.

10. Breaks Social Security’s promise with Americans. Social Security belongs to the people who have worked hard all their lives and contributed to the program. The proposal breaks that promise.

The president of the AFL-CIO, Richard Trumka, released this statement immediately after the deficit commission released its report:

With this report the Deficit Commission once again tells working Americans to Drop Dead. No proposal on fiscal issues is serious that leaves the Bush tax cuts for the rich in place while raising taxes on the middle class and slashing Social Security and Medicare. All commission members should vote no on this misguided plan. All members of Congress should also oppose these job-killing policies if they are raised in future legislation or budgets.

Our nation IS facing an immediate jobs crisis. Last night 800,000 Americans lost their unemployment insurance, and that number will grow to two million by Christmas. One hundred workers from across the country have come to Washington today to lobby Congress to extend unemployment insurance. It is unconscionable that this commission is proposing to slash these very workers Social Security and Medicare.

This whole discussion reeks of hypocrisy. The faux deficit hawks on the commission  and Senators who claim unemployment insurance must be paid for — have no problem clamoring for more unpaid Bush tax cuts for millionaires.

We need to focus now on the jobs deficit. Fifteen million people are out of work, and another eleven million have given up looking or are working part-time involuntarily. We need to end tax breaks that send American jobs overseas and invest in jobs by rebuilding our crumbling infrastructure and green technologies.

The Service Employees International Union also released the following statement by its international president, Mary Kay Henry:

“This proposal is a jobs killer at a time when our number one priority must be putting America back to work. The American people expect real solutions to create good jobs that support a family and bring fairness to our economy.

“It’s time for our policies to move beyond the Beltway to reflect the real world. For too long, we’ve forced the American people to pay the price for the failed economic policies that plunged our economy into crisis and racked up our debt. We need to reduce the deficit – and we can do so without breaking the back of American workers. We can do so without cutting the jobs of nurses, educators, first responders, fire fighters, and millions of other Americans.
“What the proposals by Representative Schakowsky, EPI, Demos and the Century Foundation, and the Citizens’ Commission all demonstrate is that we can reduce the deficit without cutting jobs or undermining the safety nets of Social Security and Medicare. These proposals offer real solutions to move our economy forward, reject the failed policies that created our current crisis, and respond to the demands of the American people to create good jobs.

“We can reduce our deficit, create jobs, and restore economic security to our communities. It’s time for our leaders to find the political courage to invest in real job creation and challenge those responsible for the crisis we face.”

And Tamara Draut, vice president of policy and programs at Demos, which released its own counterproposal to the the deficit commission’s recommendations with the Economic Policy Institute and the Century Foundation, said:

“The final recommendations released today illustrate how out of touch many on the Fiscal Commission, and many of those wielding influence in the Beltway, are with the everyday economic concerns and fears of Americans everywhere. This plan ignores the need for immediate public investments to spur job creation, relies too heavily on discretionary spending cuts, and slashes Social Security at a time when fewer Americans can count on a secure retirement.

“Outrageously, it embarks on a job-killing austerity path next fall (fiscal year 2012), when unemployment is still projected to be near 10 percent. In addition to imperiling the recovery in the short-term, the arbitrarily low debt target also hamstrings our ability to invest in our own economy – as our global competitors are doing.

“Are the $4 trillion Bush tax cuts (the same amount saved by the Commission’s proposals) worth sacrificing America’s place in the world? The Our Fiscal Security blueprint shows that we can rebuild the middle class, invest in our own economy, and put our nation’s finances on a sustainable path. The Commission’s recommendations would guarantee that America’s greatest days our behind us.”

Kingson of Social Security Works concluded his statement by saying:

About 60 percent of the House Democratic caucus – 136 members – have written to President Obama opposing all Social Security cuts, including raising the retirement age. Cuts to Social Security are opposed by 8 out of 10 Americans – from Tea Partyers to union households, young and old – according to a recent poll of Election Day voters by Lake Research Partners. And 2 out of 3 Americans support lifting the payroll tax cap so that all earnings are subject to the tax, which currently taxes income up to $106,800.

[Tuesday] the Strengthen Social Security Campaign members made tens of thousands of calls to their senators and representatives. Their message: Do not cut Social Security. Social Security did not cause the federal deficit. Cutting benefits will not fix the deficit. It is time for the Fiscal Commission and elected officials who would undermine the economic security of Americans to heed this call. If elected officials do not, the 2012 elections could be very ugly indeed.

Derek Pugh, a special assistant at the Campaign for America’s Future, focuses on economic growth and income inequality, including youth participation in the economy, the middle class, green energy, manufacturing and education.

The Senate today launched into what's known inside the Beltway as a "vote-a-rama." We already know how this drama ends when it comes to actions that would advance the goal of shared prosperity.

About Isaiah J. Poole

Isaiah J. Poole has been the editor of OurFuture.org since 2007. Previously he worked for 25 years in mainstream media, most recently at Congressional Quarterly, where he covered congressional leadership and tracked major bills through Congress. Most of his journalism experience has been in Washington as both a reporter and an editor on topics ranging from presidential politics to pop culture. His work has put him at the front lines of ideological battles between progressives and conservatives. He also served as a founding member of the Washington Association of Black Journalists and the National Lesbian and Gay Journalists Association.